8515 E. Orchard Road

Greenwood Village, CO 80111

303-737-3000

empower-retirement.com

Insurance products offered by Great-West Life & Annuity Insurance Company, Corporate Office: Greenwood Village, CO; or in New York, by Great-West Life & Annuity 

Insurance Company of New York, Home Office: White Plains, NY.

Office of Regulations and Interpretations, Employee Benefits Security Administration

Attn: Conflict of Interest Rule

Room N-5655, U.S. Department of Labor

200 Constitution Ave. NW

Washington, D.C. 20210

Re: RIN 1210-AB32 Conflict of Interest Rule

Dear Sir or Madam:

Empower Retirement appreciated the opportunity to appear at the public hearing on the 

definition of the term fiduciary. As we indicated in both our comment letter and our testimony, 

we have a number of concerns. Following our testimony, the Department of Labor (DOL) 

requested that we provide examples to clarify two of our concerns: the definition of 

recommendation and the inclusion of the term “specifically directed to” in the proposed rule.

Section 2510.3-21(a)(1)(i) of the proposal includes this language in the definition of advice: “A 

recommendation as to the advisability of acquiring, holding, disposing or exchanging securities 

or other property, including a recommendation to take a distribution of benefits or a 

recommendation as to the investment of securities or other property to be rolled over or 

otherwise distributed from the plan or IRA.” The term recommendation is further defined in 

Section 2510.3-21(f)(1) as, "A communication that, based on its content, context and 

presentation, would reasonably be viewed as a suggestion that the advice recipient engage in 

or refrain from taking a particular course of action.”

As was noted in the preamble to the proposal, and during the hearing, the DOL drew upon the 

Financial Industry Regulatory Authority’s standard of when guidance should be considered a 

recommendation. While this definition may be appropriate for broker-dealers, we believe it is 

too broad when applied to the wide range of parties that interact with participants, particularly 

call center representatives, on a daily basis.

Example: A plan participant contacts a call center representative and requests information 

regarding money held in a prior employer’s 401(k) plan. The participant wishes to move the 

balance out of that plan, so she requests information regarding her options. The call center
8515 E. Orchard Road

Greenwood Village, CO 80111

303-737-3000

empower-retirement.com

Insurance products offered by Great-West Life & Annuity Insurance Company, Corporate Office: Greenwood Village, CO; or in New York, by Great-West Life & Annuity 

Insurance Company of New York, Home Office: White Plains, NY.

representative informs her that she may have the option of leaving her balance in the prior 

plan. The participant indicates that she does not wish to leave her money with her previous 

employer. The representative informs her that she can also roll her balance into an IRA or roll 

it into her new employer’s plan. In describing the advantages and disadvantages of the 

different options, the representative informs the participant that money rolled into the new plan 

will have the advantage of fiduciary oversight and that she may have access to funds with 

lower expense ratios, including target date funds and managed accounts, in her new 

employer’s plan. The representative also tells her about the potential access to a broader array 

of funds available in a retail IRA. Based on the discussion, the participant weighs her 

alternatives and decides to roll her balance to her new employer’s plan.

Our concern is that such a transaction may be viewed as a suggestion to take a particular 

course of action that could result in a prohibited transaction. This is particularly true given that 

advice is no longer required to be given pursuant to a mutual agreement between the parties 

and no requirement that there be a reasonable expectation — based on the facts and 

circumstances — that advice is being offered in a fiduciary capacity. In the example above, the 

participant sold assets in her prior plan and purchased assets in her current plan. If this is 

deemed a recommendation, then a prohibited transaction has occurred.

While the DOL may believe that this transaction is covered in the education carve-out, we fear 

that inclusion of the term suggestion inserts an ambiguity into the proposed rule that may be 

interpreted differently by others. For these reasons, we believe the proposal could be clarified 

by specifying that a recommendation must be a call to action to take or refrain from taking a 

course of action, a much higher and clearer standard than a mere suggestion. Indeed, a call to 

action was how several representatives of the DOL described the term recommendation during 

the hearings. We also believe informative and essential conversations between participants 

and call center representatives, or other customer service representatives, will be inhibited by 

the proposal if it does not contain a requirement that there be a reasonable expectation of a 

fiduciary relationship.

In Section 2510.3-21(a)(2)(ii) advice is deemed to include rendering “advice pursuant to a 

written or verbal agreement, arrangement or understanding that the advice is individualized to, 

or that such advice is specifically directed to, the advice recipient for consideration in making 

investment or management decisions with respect to securities or other property of the plan or 

IRA.” 
8515 E. Orchard Road

Greenwood Village, CO 80111

303-737-3000

empower-retirement.com

Insurance products offered by Great-West Life & Annuity Insurance Company, Corporate Office: Greenwood Village, CO; or in New York, by Great-West Life & Annuity 

Insurance Company of New York, Home Office: White Plains, NY.

We are concerned with the inclusion of the phrase “or that such advice is specifically directed 

to” may inadvertently capture routine communications sent to a plan’s entire participant base 

or subsets thereof. When the proposed rule is read in its totality, including defining a 

recommendation as a mere suggestion, this raises another ambiguity. 

Example: Within the same plan, a participant who is 90% invested in employer stock may 

receive a flier detailing the benefits of diversification and the risks associated with individual 

securities, while another participant who has reached retirement age may receive a flier 

detailing distribution strategies. Similarly, participants using our website are prompted with the 

identification of a Next Best Step to help them reach their retirement income goals — which 

may include a suggestion to change their asset allocation. 

There is clearly no expectation of a fiduciary relationship in these communications, but, under 

the proposal, sending these materials could potentially create fiduciary status. Once again, the 

DOL may view these routine types of communications as covered under the education carveout, but the uncertainty may cause providers to re-examine their communication offerings and 

potentially eliminate valuable information that help participants. We would recommend 

eliminating the “specifically directed to” language and have the standard be whether the advice 

was individualized to the recipient.

Example: A call center representative responds to a call from a participant asking for help with 

investing. The call center representative describes the different levels of help available. The 

participant responds and says that he is not interested in paying for a managed account 

service but that he is not an active investor. The call center representative explains how target 

date funds work, and the participant asks which fund is appropriate based on his expected 

retirement date. The call center representative identifies the plan’s designated investment 

alternative that is targeted to that date.

In this situation, there would be a heightened concern about fiduciary status because a specific 

fund is mentioned. The alternative would be for the call center representative to try to guide the 

participant to the fund through a more convoluted communication with more potential for 

misunderstanding. This problem would be resolved by adding an “expectation of fiduciary 

status” component to the proposal.

As was mentioned during our testimony, Empower receives more than 4 million calls a year for 

an average of 16,000 calls each business day. Shortly after the DOL’s public hearing, we 
8515 E. Orchard Road

Greenwood Village, CO 80111

303-737-3000

empower-retirement.com

Insurance products offered by Great-West Life & Annuity Insurance Company, Corporate Office: Greenwood Village, CO; or in New York, by Great-West Life & Annuity 

Insurance Company of New York, Home Office: White Plains, NY.

experienced a period of market volatility. During this time, we saw a significant increase in the 

number of calls received. In the week of August 24, more than 94,000 calls were received, an 

increase of 18%. It should be noted, however, that 28% of those calls were received on 

Monday, August 24, the day that the Dow saw a 1,000-point drop at the opening. This 

represents a 66% increase over daily averages. Calls with investment related questions 

increased by 57%. 

We raise this to underscore the importance of our call center having the ability to communicate 

with participants without the concern that they may inadvertently provide fiduciary advice. 

Providing participants with day-to-day information regarding how their plans operates and what 

their options are is obviously important, but being able to calm and reassure participants during 

times of extreme market turmoil is invaluable. Call center representatives are, in many cases, 

the first sources that participants turn to when trying to understand the impact a market 

downturn might have on their retirement savings, and making certain that we have clear, 

unambiguous guidelines is crucial in delivering the assistance participants need and deserve.

Once again, we appreciated the chance to share our concerns and thoughts, and we would 

welcome the opportunity to continue the dialogue.

Sincerely,

Edmund F. Murphy, III | President

Empower Retirement

8515 E. Orchard Road, 3T2, Greenwood Village, CO 80111

Direct: 303.737.0630 | Cell: 617.429.5899 

Email: edmund.murphy@empower-retirement.com

www.empower-retirement.com